Vision towards your Strategic Plan
Over the next few weeks we’ll be investigating a few fundamental business processes that most Contractors typically ignore. As this year winds down, reflecting back on this crazy year will create the opportunity to decide what you want for the next.
At this time next year, what results do you want to see in your business?
Using COVID-19 as an excuse of “I don’t know” is no longer viable, business must move forward or it dwindles and dies. So using where we are right now as a baseline and assuming things will continue exactly as they are, where do you want to be?
Planning now for 2021
Looking at the goals creates a road map towards new behaviors that drive these results. You can have the most audacious goals, but if you expect to hit them using old routines and methods, you will be in for a very frustrating and disappointing year.
If you want the same results, keep doing the same things (habits/behaviors), if you want different results, you need new habits and behaviors.
Often contractors’ plans reflect the reactive nature of our industry. “Annual Planning” doesn’t develop past the schedule of projects already in and awarded. But in order to develop a more proactive company, you must create better systems to accommodate growth. Sadly most contractors do not create a road map or plan and instead become increasingly reactive, ending up making snap judgement and impulsive choices around growth.
Creating goals, benchmarks, KPI’s and strategic plans seems a little esoteric and unrealistic but it’s actually incredibly important to a smaller firm, especially if you are still small enough that you are driving the boat alone.
Save hundreds of hours of anxiety and uncertainty by setting your sail purposefully so you become less reactive, more proactive and ignore distractions.
Strategic planning and technology are two of the most important keystones a small contractor can look forward to for moving to the next level. These two position you for growth.
July and August we spent some time diving into the various technological applications that are being introduced to Construction. I would suggest looking them over so you can start exploring some of the ways technology can streamline essential work that often gets pushed to the side in the scramble to keep cash moving into the company.
We created a baseline around being comfortable with technology, understanding (or asking questions around) how it helps a small business owner do more with less and the willingness to invest in your company so that it can grow.
Committing to a vision of what you want your company to be, designing a strategic plan around that vision with benchmarks, goals, CI’s (Commander’s Intent), KPI's (key performance indicators) and AAR (after action reports) will make sure you keep your eyes ahead.
Throughout this fall we’ll be discussing a great deal around how and what planning looks like and some of the key concepts to keep in mind as you position yourself for growth. This is not something that happens overnight, but a long slow process built on strong healthy habits and systems within your company.
Here are a few subjects we’ll be touching on: Strategic Goals and Benchmarks, Commander's Intent vs traditional planning, Balanced Scorecard, KPI’s, AAR and finally a practical worksheet to help you move from one to the other.
The Strategic Plan
A Strategic Plan sets the direction for your business for a set number of months or years and is tied to the vision of your company. It helps you focus on specific activities that will drive your business, a written plan for yourself and your teams to achieve specific goals and benchmarks.
Strategy is about choice. A strategic plan makes sure that your actions are in alignment with your strategic priorities and help you and your team focus on what’s important to move you forward.
Where you want to go in the future and limiting your scope and vision so you will get there. All the shining new opportunities and options that pop up tend to distract us from our main aim. A strategic plan not only helps you go through the exercise of thinking about why you are doing, but it helps install blinders on all the other things happening, allowing you to ignore a great deal of the noise, limiting distractions.
As long as you are working your plan, you don’t need to worry about the guy next to you.
Focus your resources on the things that are going to have the most impact; taking your current time, money and resources. When you create a plan to use your resources effectively you start seeing results.
As I said above, your strategy ties in with the vision of your company, which isn’t nearly as woo woo as everyone thinks it is. Your vision is what your future business looks like. 20 years from now you want your firm controlling x amount of the market, employ x number of people and net x annually. This is far reaching and should be somewhat lofty. Everyone has different dreams and plans, but start by writing down what you want it to look like when you are “done.”
Your strategic plan takes the vision and outlines where you need to be within a specific number of months (benchmarks) or years, then breaks down the steps (strategies) to getting there. Some include tactics, some do not. Your vision may be the same as someone else's, but how you get there should be incredibly specific to who you and your team are and how you choose to tackle it.
This is often why teams schedule quarterly retreats, I used to take the week before Labor Day with my team to reinforce (or redefine) our Vision and then start the process of Strategic planning. After Labor day people would continue to flesh out ideas and concepts. We would return to this work the week between Christmas and New Years to finalize the plan. This gave all the team leaders time to talk, tinker and discuss plans with their own teams, having a firm idea of the Vision, but flexibility around the plan. I would strongly suggest making time for this planning, even if it’s just you. Go somewhere other than your office or home to do this planning, changing scenery can really change your perspective as well.
Creating benchmarks and goals that build towards your vision helps Managers define their purpose and direct the staff. Often called a Commander's Intent, if your team knows where everyone is going, they are free to make better decisions towards the outcome everyone is working towards without bureaucracy that often bog firms down.
It also helps flesh out and plan around predictable opportunities, roadblocks or issues that are upcoming. New regulations could be coming down from DoB, the state may pass a law that will impact work in a year's time (Prevailing Wage Bill anyone?). It may also be an opportunity that you may see coming, like the federal government passing an infrastructure bill. Where do you want to be when those funds are passed from the federal government, to the state and from the state to the city and/or MTA?
The most important step is aligning strategic development with your leadership team first. Making sure the people steering the boat are actually IN in the same boat. You can do this a few ways:
Create a Commander's Intent (CI): a crisp pointed statement that specifies the goal or desired end of state for a specific plan or timeframe.
For example, if you are a small contractor who’s whole team is on one project and you decide your CI for Q1 2021 is completing a project at a specific time. Define what “completed” looks like to you so that your team has something concrete to work with “done” means different things to different people. Fuzzy goals don’t help anyone.
By March 12 2021 (specific date) 43 W44th St (specific project) will have all gangboxes removed, the final req will be submitted in time for revisions to come back and sign off for the final punchlist will be in the project binder (concrete deliverables).
Put this at the top of each memo, work order, toolbox talk for that project, you remind your men and women what the team is pushing for, this gives them an incredibly specific target to hit. This leaves your managers free to make daily decisions that support your benchmark.
If you are a slightly larger company you may want to do a Scorecard (which we will be discussing in a few weeks). For now, the scorecard has four perspectives:
Customer/Client Acquisition & Relationships
Team and Personnel Development
If you have 10-15 strategic objectives, they shouldn’t all fall into just one of those perspectives. Instead, they should be (at least somewhat) evenly distributed among the four. But keep in mind that a Commander's Intent is still relatable to each of these four quadrants.
If a scorecard seems extraneous and labor intensive creating Strategic Objectives for separate divisions can be impactful. You should have no more than 15 objectives in your strategy. Objectives should link together as a group in a logical way. Be sure that all of your objectives work together in a way that reflects your strategic goal that builds to your vision.
Every objective must have at least a verb and a noun, but very impactful ones have deadlines:
Best: $5M in signed contracts by March 31 2021.
Good: Improve Sales.
Make sure you aren’t including “projects” as objectives.
Best: Monthly calls to potential clients to develop relationships. Weekly calls/emails with existing clients for project progress reports. Daily reports from crews for progress reports.
Good: Improve communication with clients.
Bad: Implement CRM.
Creating a strategic plan is a great way to prepare those in your organization for being able to talk about your strategy consistently and coherently, reinforcing your intent for the next year.
Ultimately, it focuses your organization's efforts and pulls everyone together for a common purpose that’s been outlined. Next week we’ll discuss creating a scorecard, which has within it, benchmarks.